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Learjet 85 pause has spillover effect on Héroux-Devtek

Jan. 28, 2015, Longueuil, Que. - Aerospace supplier Héroux-Devtek Inc. is feeling the impact of Bombardier Inc.’s indefinite halt of its Learjet 85 business-jet program.


January 28, 2015
By The Globe and Mail

Longueuil, Que.-based Héroux-Devtek said on Tuesday it will book a third-quarter non-cash charge of $7.9-million before taxes as a result of the “pause” in the Learjet 85 program announced Jan. 15.

The charge is for the impairment of capitalized development costs on the business jet, Héroux-Devtek said in a news release.

Héroux-Devtek is the developer and supplier of the complete landing-gear system for the aircraft.

Bombardier said it is putting the Learjet 85 on ice because of “continued weakness of the Light aircraft category since the economic downturn.”

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It will record a pretax, fourth-quarter special charge of about $1.4-billion (U.S.) and cut about 1,000 jobs at its sites in Querétaro, Mexico and Wichita, Kan.

Héroux-Devtek said the $7.9-million charge is equivalent to $5.8-million or 16 cents per share after taxes.

Bombardier has been in cost-cutting mode as it comes under financial pressure because of cost overruns and delays in its C Series commercial aircraft program.

It said it has decided to focus on the development of the C Series and the Global 7,000/8,000 business jets.

The Learjet 85 was initially to enter service in late 2013 but that was delayed as Bombardier experienced teething problems developing the all-new, technologically innovative plane.

Héroux-Devtek is principally a manufacturer of landing gear after it sold its aerostructure and industrial products divisions in 2012.